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Use lots of independent contractors? Heed new legal risks

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in Compensation and Benefits,Employee Benefits Program,Employment Law,Human Resources

Same work, fewer expenses and less hassle.

That’s the perceived advantage of using independent contractors. And the mantra has its appeal. But many employers have opted for freelancers only to find a new set of problems: lack of control, unreliable workers and, in some cases, litigation.

In the worst-case scenario, a court or government agency will force you to reclassify those workers from independent contractors to employees. That can mean you’ll owe thousands in back wages, overtime payments, employers’ share of Social Security taxes and workers’ comp benefits.

That’s why employers who use independent contractors must structure their contracts—and treat those workers—very carefully to comply with IRS and Labor Department rules. Each agency sets different rules about what type of workers are considered “employees” and “independent contractor.” Plus, labor unions are now shaking the trees of employers who use lots of...(register to read more)

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